By Nurul Jannah Kamaruddin
KUALA LUMPUR: With no sign of de-escalation in the Middle East conflict, the ringgit came under pressure to open lower against the US dollar on Friday.
At 9 am, the local currency fell to 4.7775/7830 against the greenback from Thursday’s close of 4.7680/7710.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid told Bernama that the currency market would continue to witness a volatile currency landscape in the near term.
“The ringgit is likely to remain guarded today following yesterday’s performance. Concerns over the Hamas-Israel conflict is the main focal point, which will continue to affect market sentiments.
“On top of that, the 10-year US Treasury yield is reaching the 5.0 per cent level, suggesting that the bond market is seeing inflation premium which is expected to drive the long term yield higher, while the short dated yield such as the three-month yield fell to 5.47 per cent, leading to a steeper yield curve although it remains inverted,” he said.
The 10-year Treasury yield breaks above 4.9 per cent this week, the first time since 2007, further boosting the US dollar appearance Federal Reserve chairman Jerome Powell yesterday indicated that the central bank is “proceeding carefully” on monetary policy decisions following the soaring bond yields that have helped tighten financial conditions significantly. The longer-term bond yields have been an important driving factor in this tightening, Powell said in remarks at the Economic Club of New York Luncheon.
